Sinochem also will pay $1.2 billion of Pioneer Natural’s
share of future drilling costs, the Dallas-based company said in
a statement yesterday. Pioneer Natural will continue to operate
the 207,000 net acres in the Wolfcamp. The acquisition is
Beijing-based Sinochem’s first oil and natural gas purchase from
a U.S. company, according to data compiled by Bloomberg.

Sinochem’s purchase follows past deals in which a Chinese
buyer has acquired a stake in U.S. shale formations in exchange
for funding drilling costs. Cnooc Ltd. agreed to pay as much as
$1.3 billion including drilling costs for an interest in
Chesapeake Energy Corp.’s Niobrara shale project in 2011. China
Petrochemical Corp. and Devon Energy Corp. agreed to a shale
deal valued at as much as $2.5 billion last year.

“This transaction provides Sinochem with valuable exposure
to an attractive U.S. oil shale play, further strengthening our
foreign investment portfolio,” Zhang Wei, vice president of
Sinochem, said in a statement today. “With decades of
potential, we look forward to successful joint development and
continued growth of our relationship with Pioneer.”

The companies plan to drill 86 horizontal wells in the
Wolfcamp this year, increasing to 120 next year and 165 in 2015,
Pioneer said yesterday.

Largest Holder

Pioneer is the largest acreage holder in the Wolfcamp, with
more than 400,000 acres, according to its website. Its first two
wells in the area produce about 75 percent oil, 20 percent
natural gas liquids and 5 percent gas. The company had planned
to drill 90 horizontal wells in the area by the end of 2013.

“This accelerated development will add significant
production and reserves for Pioneer while enhancing shareholder
value,” Scott Sheffield, chairman and chief executive officer
of Pioneer Natural, said in the statement yesterday. Pioneer
Natural is also halting efforts to sell properties in the
Barnett Shale because of low bids, the company said in a
separate statement.

In the past 12 months, Chinese companies have announced
acquisitions valued at $17.9 billion for North American oil and
gas companies, according to data compiled by Bloomberg. Chinese
interest in shale, a dense rock formation that holds oil and
gas, comes as the nation seeks the technology to unlock its own
reserves.

China holds 25.1 trillion cubic meters of exploitable shale
reserves, the country’s Ministry of Land and Resources said
March 1, citing a nationwide survey.